ContractsProf Blog

Editor: D. A. Jeremy Telman
Valparaiso Univ. Law School

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Tuesday, May 27, 2014

Author Meets Reader Salon on Wrap Contracts

Law and Society Association's Annual Meeting is only a few days away.  There will be an Author Meets Reader Salon on my book, WRAP CONTRACTS on Friday, 5/30, 8:15am-10:00am in the Duluth Room. Shubha Ghosh (Wisconsin), Danielle Kie Hart (Southwestern) and Juliet Moringiello (Widener) will be joining me in what promises to be a lively discussion about those pesky clickboxes and pop-ups on your screens.  If you are attending the meeting, please stop by and join us!  

May 27, 2014 in Books, Conferences, Contract Profs, Miscellaneous, Web/Tech | Permalink | Comments (0) | TrackBack (0)

Weekly Top Tens from the Social Science Research Network

SSRNSSRN Top Downloads For Contracts & Commercial Law eJournal
RECENT TOP PAPERS 

RankDownloadsPaper Title
1 783 Aftermarketfailure: Windows XP's End of Support 
Andrew Tutt 
Yale University - Information Society Project 
2 212 The Futility of Cost Benefit Analysis in Financial Disclosure Regulation 
Omri Ben-Shahar and Carl E. Schneider 
University of Chicago Law School and University of Michigan Law School 
3 151 The FTC and Privacy and Security Duties for the Cloud 
Daniel J. Solove and Woodrow Hartzog 
George Washington University Law School and Samford University - Cumberland School of Law 
4 129 Public-Private Contracting and the Reciprocity Norm 
Wendy Netter Epstein 
DePaul University - College of Law 
5 120 Payment after Actavis 
Michael A. Carrier 
Rutgers University School of Law - Camden 
6 97 From Status to Contract: The Unhappy Case of Johann Sebastian Bach 
Yale Law School; NYU School of Law - Straus Institute for the Advanced Study of Law and Justice; University of Haifa - Faculty of Law
7 79 Good Faith in Contract: Why Australian Law is Incoherent 
John Carter 
University of Sydney - Faculty of Law 
8 70 The Incoherent Role of Bargaining Power in Contract Law 
Max N. Helveston and Michael S. Jacobs 
DePaul University - College of Law and DePaul University - College of Law 
9 68 The Expectation Measure and Its Discontents 
Shawn J. Bayern and Melvin A. Eisenberg 
Florida State University - College of Law and University of California, Berkeley - School of Law 
10 68 The Europeanisation of Contract Law and the Proposed Common European Sales Law 
Hector Lewis MacQueen 
University of Edinburgh - School of Law 

SSRN Top Downloads For LSN: Contracts (Topic)
RECENT TOP PAPERS

RankDownloadsPaper Title
1 167 The Evolving Private International Law/Substantive Law Overlap in the European Union 
Ronald A. Brand 
University of Pittsburgh - School of Law 
2 139 Public Lands and the Federal Government's Compact-Based 'Duty to Dispose': A Case Study of Utah's H.B. 148 — The Transfer of Public Lands Act 
Donald J. Kochan 
Chapman University School of Law
3 129 Public-Private Contracting and the Reciprocity Norm 
Wendy Netter Epstein 
DePaul University - College of Law 
4 97 From Status to Contract: The Unhappy Case of Johann Sebastian Bach 
Yale Law School; NYU School of Law - Straus Institute for the Advanced Study of Law and Justice; University of Haifa - Faculty of La
5 79 Good Faith in Contract: Why Australian Law is Incoherent 
John Carter 
University of Sydney - Faculty of Law
6 70 The Incoherent Role of Bargaining Power in Contract Law 
Max N. Helveston and Michael S. Jacobs 
DePaul University - College of Law and DePaul University - College of Law 
7 68 The Expectation Measure and Its Discontents 
Shawn J. Bayern and Melvin A. Eisenberg 
Florida State University - College of Law and University of California, Berkeley - School of Law
8 68 The Europeanisation of Contract Law and the Proposed Common European Sales Law 
Hector Lewis MacQueen 
University of Edinburgh - School of Law
9 60 Refining Rectification 
David McLauchlan 
Victoria University of Wellington - Faculty of Law 
10 57 Personal and Proprietary Remedies for Breach of Confidence: Nearer to Breach of Fiduciary Duty or Breach of Contract? 
Graham Virgo 
University of Cambridge - Faculty of Law 

 

May 27, 2014 in Recent Scholarship | Permalink | TrackBack (0)

Third Circuit Rejects Insurer's Motion to Compel Arbitration of Medical Device Suppliers' Claims

3rd cirPlaintiffs in Cardionet, Inc. v. CIGNA Health Corp supply medical devices that permit patients to monitor heart function while away form a hospital.  CIGNA insured these businesses beginning in 2007, but in 2012, CIGNA announced that it would no longer do so because the services the plaintiffs  provide are "considered experimental, investigational or unproven."  CIGNA sent out a "Physician Update" informing them that it would no longer insure the plaintiffs' businesses.  The plaintiffs allege that CIGNA was in possession of no information relating to their services in 2012 that CIGNA did not already possess in 2007.  Tehy were miffed that services that were insureable in 2007 had become uninsureable in 2012.  They sued on their own behalf and on behalf of their patients, seeking damages and injunctive relief and alleging causes of action sounding in breach of contract, tortious interference and trade libel.  

CIGNA moved to compel arbitration pursuant to the original 2007 agreement which included a clause requiring arbitration of all disputes "regarding the performance or interpretation of the Agreement."  The District Court found that the arbitration provision applied and granted CIGNA's motion to compel  arbitration.  The Third Circuit reversed.

As to the plaintiffs' claims brought on their own behalf, the court noted that they all arose out of the following common set of factual allegations: 

CIGNA made false and misleading statements in the Physician Update about the nature and quality of OCT; CIGNA conveyed the false impression that OCT would never be covered under any health plans CIGNA administers; and the Physician Update injured them by decreasing the number of physicians willing to use OCT services.

The Third Circuit determined that the plaintiffs' claims related to the Physician Update and not to the plaintiffs' agreements with CIGNA.  If the Physician Update indeed contained material misstatements as plaintiffs allege, it would harm them whether or not they were insured by CIGNA because it informs doctors that, in CIGNA's view, the services plaintiffs provide are unproven.

The Third Circuit also determined that the claims brought on behalf of patients were not subject to arbitration, even if they would have been arbitrable if brought by the plaintiffs on their own behalf.  First, the patients were not signatories to the arbitration agreement and thus could not be brought within its ambit.  Second, the fact that plaintiffs took on their patients' claims as assignees did not bring the assigned claims within the scope of the arbitration provision, because that provision does not require arbitration of assigned claims.  

May 27, 2014 in Recent Cases | Permalink | Comments (0) | TrackBack (0)

Saturday, May 24, 2014

Mutuality and Wrap Contracts

As I've noted in a prior post, there is a lawsuit pending against Google for email scanning which was recently denied class status.  Something that's puzzled me about wrap contracts generally, including Google's, is that many of them don't seem to be contracts at all - and not simply because of the (lack of) consent issue.  They typically contain modification at will clauses and termination at will clauses.  In contracts class, I teach students that generally (with the exception of employment contracts) these clauses lack mutuality unless constrained in other ways, such as a notice period.  While there may be consideration (use of service in exchange for...data?  eyeballs?  not clear), there is no consideration if the promises are illusory and don't actually bind a party.   Google's terms of use, for example, state:

"You can stop using our Services at any time, although we’ll be sorry to see you go. Google may also stop providing Services to you, or add or create new limits to our Services at any time."

and this unilateral modification clause:

"We may modify these terms or any additional terms that apply to a Service to, for example, reflect changes to the law or changes to our Services. You should look at the terms regularly. We’ll post notice of modifications to these terms on this page. We’ll post notice of modified additional terms in the applicable Service. Changes will not apply retroactively and will become effective no sooner than fourteen days after they are posted. However, changes addressing new functions for a Service or changes made for legal reasons will be effective immediately. If you do not agree to the modified terms for a Service, you should discontinue your use of that Service."

Google then isn't bound to actually provide anything according to its Terms of Use. 

In the email scanning case, Google is making the argument that consent to email scanning was obtained in the context of "consenting" to the Terms of Use.  But if these "contracts" are not really contracts because they lack mutuality, then can Google really claim that their users "consented" to the email scanning?  Is there blanket assent to terms outside of the context of a contract? 

 

 

 

May 24, 2014 in Commentary, E-commerce, Miscellaneous, Web/Tech | Permalink | Comments (2) | TrackBack (0)

Friday, May 23, 2014

A Small Fish in a Big Game

By Myanna Dellinger

In California, the Bureau of Reclamation is in charge of divvying up water contracts in the California River Delta between the general public and senior local water rights owners.  Years ago, it signed off on long-term contracts that determined “the quantities of water and the allocation thereof” between the parties.  About a decade ago, it renewed these contracts without undertaking a consultation with the Fish and Wildlife Service (“FWS”) to find out whether the contract renewals negatively affected the delta smelt, a small, but threatened, fish species.  The thinking behind not doing so was that since the water contracts “substantially constrained” the Bureau’s discretion to negotiate new terms, no consultation was required.

Not correct, concluded an en banc Ninth Circuit Court of Appeals panel Ninth Circuit Court of Appeals panel recently.  By way of brief background, Section 7 of the Endangered Species Act (“ESA”) requires federal agencies to ensure that none of their actions jeopardizes threatened or endangered species or their habitat.  16 U.S.C. § 1536(a).  Among other things, federal agencies must consult with the FWS if they have “some discretion”"some discretion" to take action on behalf of a protected species.  In this case, since the contractual provision did not strip the Bureau of all discretion to benefit the species, consultation should have taken place.  For example, the Bureau could have renegotiated the pricing or timing terms and thus benefitted the species, said the court.

In 1993, the delta smelt had declined by 90% over the previous 20 years and was thus listed as a threatened species under the ESA.  Of course, fish is not the only species vying for increasingly scarce California water.  Man is another.  The current and ongoing drought in California – one of the worst in history – raises questions about future allocations of water.  Who should be prioritized?  Private water right holders?  People in Southern California continually thirsty and eager to water their often overly water-demanding garden plants?  Industry?  Farmers?  Not to mention the wild animals and plants depending on sufficient levels of water?  There are no easy answers here.

The California drought is estimated to cost Central Valley farmers $1.7 billion and 14,500 jobs.  While that seems drastic, the drought is still not expected to have any significant effect on the state economy as California is no longer an agricultural state.  In fact, agriculture only accounts for 5% of jobs in California.  Still, that is no consolation to people losing their jobs in California agriculture or consumers having to pay higher prices for produce in an increasingly warming and drying California climate. 

The 1974 movie Chinatown focused on the Los Angeles water supply system.  40 years later, the problem is just as bad, if not worse.  The game as to who gets water contracts and for how much water is still on.

May 23, 2014 in Commentary, Current Affairs, Food and Drink, Government Contracting, Recent Cases, True Contracts | Permalink | Comments (0) | TrackBack (0)

Fargo: A TV Series About an Implied Contract

Martin_FreemanThe event that fuels the first-season plot of the new F/X television series Fargo is a conversation in an emergency room waiting room.  Lester Nygaard (Martin Freeman, left) has just been assaulted by Sam Hess, who used to bully him mercilessly in high school.  Hess intimidates and humiliates Lester in front of Hess's comically neanderthal sons.  Although Hess never actually hits Lester, the result is still a broken nose.  

While waiting for someone to attend to his injury, Lester has a conversation with Lorne Malvo (Billy Bob Thornton, Right), who was injured when his car hit a deer and careened off the highway.  Once the car came to rest in a snow-covered field, a man wearing only boxer shorts, who for some reason had been in the trunk of Malvo's car, jumped out and ran for the cover of the nearby woods.  That's pretty much all we know about Malvo when he and Lester have their conversation.

BillyBobThorntonMalvo manages to learn from Lester what had happened to him and that the man responsible for his injuries is named Hess.  Malvo suggests that Lester ought to kill Hess, but Lester is not that kind of person (or at least not yet), so he dismisses the idea.  Malvo offers to kill Hess for Lester.  Lester just gives him that look of incredulity that has been a staple of Martin Freeman's wonderful career.  Malvo insists that Lester say either yes or no, but  a nurse interrupts the conversation to take Lester in for treatment, and Lester says nothing.

Spoiler alert: you may not want to read below the jump if you have not watched the show (and intend to do so) as a few plot details are revealed:

Continue reading

May 23, 2014 in Commentary, Television | Permalink | Comments (0) | TrackBack (0)

Thursday, May 22, 2014

Fourth Circuit: Dodd-Frank Does Not Invalidate Arbitration Agreement

4th CircuitDr. Armand Santoro (Dr. Santoro) was employed as a Senior Manager by Accenture Federal Services (Accenture) from 1999-2011.  He was dismissed at age 66 and replaced by a younger man.  In 2005, he signed an employment agreement that was subsequently renewed annually.  The agreement included a broad arbitration provision.  He filed a claim alleging age discrimination in violation of the District of Columbia Human Rights Act.  He later added claims alleging violations of the Age Discrimination in Employment Act (ADEA), the Family and Medical Leave Act (FMLA), and the Employee Retirement Income Security Act (ERISA).

Accenture moved to compel arbitration.  Dr. Santoro opposed this motion, arguing that three whistleblower provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 preempted the arbitration agreement.  The District Court granted Accenture's motion to compel arbitration, finding that Dr. Santoro's claims were not whistleblower claims.  In Santoro v. Accenture Federal Services, LLC, the Fourth Circuit affirmed.  

On appeal, Dr. Santoro contended that the Dodd-Frank provisions at issue were intended to invalidate all pre-dispute arbitration agreements that did not include a carve-out for Dodd-Frank whistleblower claims.  Dr. Santoro claimed that such arbitration agreements were invalid whether or not the particular claim at issue was a whistleblower claim.  Echoing in the U.S. Supreme Court, the Fourth Circuit noted that Dodd-Frank's language is a model a statutory clarity and it clearly prohibits only the arbitration of whistleblower claims.

May 22, 2014 in Recent Cases | Permalink | Comments (0) | TrackBack (0)

Wednesday, May 21, 2014

Conference on the Future of Legal Education

 Join us & help shape

the future of legal education

June 13-15, 2014

in Greensboro, N.C.

FEATURED SPEAKERS

• William C. Hubbard, President Elect, American Bar Association; Chair, Board of Directors, World Justice Project; Partner, Nelson Mullins Riley & Scarborough

• Bill Henderson, Professor of Law, Indiana University Maurer School of Law; named the second most influential person in legal education by National Jurist (2012 & 2013)

• Experiential learning leaders from other disciplines including: architecture, business, engineering and medicine

• Change and innovation experts from: Casa Myrna Vazquez, Inc., ExperiencePoint and Legal OnRamp

• Law scholars and teachers from: CUNY School of Law; Elon University School of Law; Hamline School of Law; Indiana University Mauer School of Law; New York Law School; Northeastern University School of Law; Notre Dame Law School; NOVA Southeastern University Shepard Broad Law Center; University of Denver Sturm College of Law; University of Minnesota School of Law; Vermont Law School; Washington College of Law

ABOUT THE SYMPOSIUM: The symposium will focus innovations to improve legal education and enhance the relevance of lawyers in the rapidly changing 21st century. Presentations and discussions will emphasize effective and integrated experiential education to accommodate financial and structural challenges in law and legal education, addressing the following questions:

• What do we mean by experiential learning?

• What are the → Innovations → Barriers → Successes in producing integrated and effective curricula?

• What ideas have the Alliance Working Groups developed since the Inaugural Symposium?

• What perspective can other disciplines provide regarding our efforts?

The symposium is being hosted by the Alliance for Experiential Learning in Law and Elon University School of Law. Visit law.elon.edu/aell to register and to learn more about the symposium. The registration fee is $100. Contact Jane Law at Elon University School of Law with any questions related to registration: jlaw@elon.edu or (336) 279-9325.

ORGANIZERS

The Alliance for Experiential Learning in Law Steering Committee

• Cindy Adcock, Charlotte School of Law

• Margaret Barry, Vermont Law School

• Luke Bierman, Dean-Designate, Elon University School of Law

• Susan Brooks, Drexel University School of Law

• Christine Cimini, Vermont Law School

• Roberto Corrada, Sturm College of Law, University of Denver

• Bob Dinerstein, Washington College of Law, American University

• Steve Ellmann, New York Law School

• Deborah Epstein, Georgetown Law

• Bob Jones, Notre Dame Law School

• Kate Kruse, Hamline University School of Law

• Susan Reich Paulsen, University of Minnesota Law School

• Ruthane Robbins, Rutgers University School of Law

• Pat Coughlan Voorhies, Northeastern University School of Law

The Second National Symposium on Experiential Learning in Law Planning Committee

• Steve Friedland, Co-Chair, Elon University School of Law

• Margaret Barry, Co-Chair, Vermont Law School

• Bill Henderson, Co-Chair, Indiana University Maurer School of Law

• Christy Benson, Elon School of Business

• Olympia Duhart, Nova University School of Law

• Jim Exum, Elon University School of Law; Former Chief Justice of the North Carolina Supreme Court

• Bill McNichol, Reed Smith; Rutgers University School of Law

• Madeline Obler-Grill, Elon Law Journal

• Gene Pridgen, K&L Gates; Immediate Past President, North Carolina Bar Association

• Vivian Wexler, Bingham McCutchen

• Pat Coughlan Voorhies, Northeastern University School of Law

May 21, 2014 in Conferences, Teaching | Permalink | TrackBack (0)

New in Print

Weak Language Skills No Bar to Enforcement of Arbtiration Agreement

Nicolas Molina (Molina), a warehouse workder for Sandinavian Designs, Inc. (Scandinavian) sought to sue after his employment was terminated.  Scandinavian sought to compel arbiration.  Molina opposed the motion, contending that he speaks very little English and thus had no idea that he had signed an arbitration agreement.  Last month, in Molina v. Scandinavian Designs, Inc., the Northern District of California rejected the argument.  

Danish_Design_Center_chairs
In part, Mr. Molina's problem is evidentiary.  Scandinavian claims that an administrative assistant met with Mr. Molina on the day he was hired and presented him with two forms to sign: a one-page employment agreement and a two-page arbitration agreement.  Scandinavian claims that the administrative assistant spoke with Mr. Molina in both English and Spanish, gave him time to read the forms and told him to ask questions is he had any.  

Molina tells a very different version of events, but it doesn't matter.  As the court explains, 

[U]nder established California law, even if Molina could read very little English, Molina's signature on the Arbitration Agreement manifests his assent to its terms, binding him to the contract.

The court then proceeds to explain that contracts are based on mutual consent of the party.  But we are not talking about actual subjective assent, the proof of which may be beyond the court's reach.  Instead, mutual consent is proved when there is a manifestation of consent such as, in this case, a signature on a document clearly titled "Arbitration Agreement."  Molina has a "duty" to learn the contents of the document before he signed.

For good measure, the court also found that there was no problem under California law relating to the authority of the administrative assistant to sign the arbitration agreement on behal of Scandinavian.  Nor could Molina persuade the court that the arbitration agreement was unconscionable.  

The court granted Scandinavian's motion to compel arbitration and dismissed the case without prejudice.

May 21, 2014 in Recent Cases | Permalink | Comments (0) | TrackBack (0)

Tuesday, May 20, 2014

Weekly Top Tens from the Social Science Research Network

SSRNSSRN Top Downloads For Contracts & Commercial Law eJournal

RECENT TOP PAPERS 

RankDownloadsPaper Title
1 781 Aftermarketfailure: Windows XP's End of Support 
Andrew Tutt 
Yale University - Information Society Project 
2 206 The Futility of Cost Benefit Analysis in Financial Disclosure Regulation 
Omri Ben-Shahar and Carl E. Schneider 
University of Chicago Law School and University of Michigan Law School 
3 167 A Draft Australian Law of Contract 
Ted WrightM P Ellinghaus and D StL Kelly 
University of Newcastle (Australia) - Faculty of Business and Law, University of Newcastle (Australia) - Faculty of Business and Law and University of Newcastle (Australia) - Faculty of Business and Law 
4 145 The FTC and Privacy and Security Duties for the Cloud 
Daniel J. Solove and Woodrow Hartzog 
George Washington University Law School and Samford University - Cumberland School of Law 
5 128 Public-Private Contracting and the Reciprocity Norm 
Wendy Netter Epstein 
DePaul University - College of Law
6 127 Introduction to Philosophical Foundations of Contract Law 
Gregory Klass 
Georgetown University Law Center
7 124 Document Appreciation: Some Characteristics of Legal Documents (and Talking with Students About Them) 
Jay A. Mitchell 
Stanford Law School 
8 117 Payment after Actavis 
Michael A. Carrier 
Rutgers University School of Law - Camden 
9 99 Property as the Law of Democracy 
Joseph William Singer 
Harvard Law School 
10 94 Democratic Contract Law 
Martijn W. Hesselink 
University of Amsterdam - Centre for the Study of European Contract Law (CSECL

SSRN Top Downloads For LSN: Contracts (Topic)

RECENT TOP PAPERS 

RankDownloadsPaper Title
1 161 The Evolving Private International Law/Substantive Law Overlap in the European Union 
Ronald A. Brand 
University of Pittsburgh - School of Law 
2 132 Public Lands and the Federal Government's Compact-Based 'Duty to Dispose': A Case Study of Utah's H.B. 148 — The Transfer of Public Lands Act 
Donald J. Kochan 
Chapman University School of Law 
3 128 Public-Private Contracting and the Reciprocity Norm 
Wendy Netter Epstein 
DePaul University - College of Law 
4 127 Introduction to Philosophical Foundations of Contract Law 
Gregory Klass 
Georgetown University Law Center 
5 124 Document Appreciation: Some Characteristics of Legal Documents (and Talking with Students About Them) 
Jay A. Mitchell 
Stanford Law School 
6 94 Democratic Contract Law 
Martijn W. Hesselink 
University of Amsterdam - Centre for the Study of European Contract Law (CSECL) 
7 90 From Status to Contract: The Unhappy Case of Johann Sebastian Bach Jonathan Yovel 
Yale Law School; NYU School of Law - Straus Institute for the Advanced Study of Law and Justice; University of Haifa - Faculty of Law
8 69 The Incoherent Role of Bargaining Power in Contract Law 
Max N. Helveston and Michael S. Jacobs 
DePaul University - College of Law and DePaul University - College of Law
9 69 Good Faith in Contract: Why Australian Law is Incoherent 
John Carter 
University of Sydney - Faculty of Law 
10 58 The Expectation Measure and Its Discontents 
Shawn J. Bayern and Melvin A. Eisenberg 
Florida State University - College of Law and University of California, Berkeley - School of Law 

 

 

May 20, 2014 in Recent Scholarship | Permalink | TrackBack (0)

Sunday, May 18, 2014

More on the Structure of Cable Contracts

By Myanna Dellinger

Recently, Jeremy Telman blogged here about the insanity of having to pay for hundreds of TV stations when one really only wants to, or has time to, watch a few. 

Luckily, change may finally be on its way.  The company Aereo is offering about 30 channels of network programming on, so far, computers or mobile devices using cloud technology.  The price?  About $10 a month, surely a dream for “cable cutters” in the areas which Aereo currently serves. 

How does this work?  Each customer gets their own tiny Aereo antenna instead of having to either have a large, unsightly antenna on their roofs or buying expensive cable services just to get broadcast stations.  In other words, Aereo enables its subscribers to watch broadcast TV on modern, mobile devices at low cost and with relative technological ease.  In other words, Aereo records show for its subscribers so that they don’t have to. 

That sounds great, right?  Not if you are the big broadcast companies in fear of losing millions or billions of dollars (from the revenue they get via cable companies that carry their shows).  They claim that this is a loophole in the law that allows private users to record shows for their own private use, but not for companies to do so for commercial gain and copyright infringement.

Of course, the great American tradition of filing suit was followed.  Most judges have sided with Aero so far, the networks have filed petition for review with the United States Supreme Court, which granted the petition in January.

Stay tuned for the outcome in this case…

May 18, 2014 in About this Blog, Commentary, Current Affairs, E-commerce, Famous Cases, In the News, Recent Cases, Television, True Contracts, Web/Tech | Permalink | Comments (0) | TrackBack (0)

Friday, May 16, 2014

New in Print

Pile of BooksKevin E. Davis, moderator; Nicholas Bliss, Chantal Kordula, Kent Rowey, Ana Karina Esteves de Souza, & Carlos Umana, panelists, Public Private Partnerships in International Energy & Infrastructure Project Finance, 9 N.Y.U. J.L. & Bus. 729 (2013)

David G. Epstein, Timothy Archer & Shalayne Davis, Extrinsic Evidence, Parol Evidence, and the Parole Evidence Rule: A Call for Courts to Use the Reasoning of the Restatements Rather than the Rhetoric of Common Law, 44 N.M. L. Rev. 49 (2014)

Franco Ferrari, moderator; Matthieu de Boisseson, Inka Hanefeld, Mark Kantor, Ryan Reetz  & Laurence Shore, panelists, Multi-Party Arbitration Issues in International Project Finance Arbitration, 9 N.Y.U. J.L. & Bus. 759 (2013)

Daniel P. Graham, Nooree Lee & Katherine McDonald. Risk Allocation in State Health Care IT Contracting under the ACA, 43 Pub. Cont. L.J. 267 (2014)

Inka Hanefeld, Arbitration in Banking and Finance, 9 N.Y.U. J.L. & Bus. 917 (2013)

Stephen A. Plass, Using Pyett to Counter the Fall of Contract-Based Unionism in a Global Economy, 34 Berkeley J. Emp. & Lab. L. 219 (2013)

Val Ricks, Consideration and the Formation Defenses, 62 U. Kan. L. Rev. 315 (2013)

Arpan A. Sura & Robert A. DeRise, Conceptualizing Concepcion:The Continuing Viability of Arbitration Regulations, 62 U. Kan. L. Rev. 403 (2013)

Constance A. Wilkinson & Selena M. Brady, The Expansion of Federal Subcontractor Status to Health Care Providers, 43 Pub. Cont. L.J. 293 (2014)

 

May 16, 2014 in Government Contracting, Recent Scholarship | Permalink | TrackBack (0)

Thursday, May 15, 2014

The Structure of Cable Contracts

Today's New York Times features an article reporting on a 2012 study that indicates that consumers are better off being forced to buy bundled packages than they would be if they could choose to purchase only the cable channels they actually view.  The argument seems to boil down to the fact that it costs the cable companies about the same to bring you four channels as it does for them to bring you 179 channels, so they are going to find a way to charge you the same regardless, and now you will miss out on watching channels that you only watch occasionally.  Moreoever, the channels that are most in demand on a per-channel basis will now demand higher fees to make up for lost revenues from their sister stations that fewer people watch and which consequently cannot generate as much advertising revenue as they could under the bundled system.  

Televisions
Given that this story is based on one two-year old study and comes from Times correspondent Josh Barro, who also gives the thumbs up to Frontier Airlines for charging people extra to use overhead storage bins, I'm going to file this story provisionally under, "Wait, that can't be right," and see if any counterarguments turn up.  The comments on the story indicate that some of the assumptions underlying the study and Barro's column could be questioned.

May 15, 2014 in In the News, Television | Permalink | Comments (0) | TrackBack (0)

Wednesday, May 14, 2014

The Costs of Cancellation

Conference hotel
Conference Hotel (not subject to boycott)

Yesterday's New York Times features a story about the costs associated with hotel boycotts when an organization has booked a hotel to host a conference or meeting long in advance.  This issue ought to be a familiar to anyone who attended the 2011 annual AALS meeting in San Francisco, for which the conference hotel was a Hilton whose workers were on strike.

The article details the costs involved in cancellations.  Often the organization is contractually obligated to pay hundreds of thousands of dollars to the hotel even if the conference ulimately takes place at a different venue.  According to the Times, if the cancellation is on short notice, the organization is typically obligated to pay 90% of expected room costs and 90% of expected banqueting services.  And then there are, of course, the costs of finding an alternative venue in proxity to the original choice on relatively short notice.   Major conferences can be booked years in advance.  

Sometimes it is possible to mitigate the harm -- by booking at a related hotel or by promising to return to the original hotel if the policy that causes offenese is revoked.  The former is unlikely in cases where the problem is with the entity that owns the hotel.  But it is more likely in cases like those that arose in connection with anti-immigrant legislation passed in Arizona.  Organizations could punish the state by moving to related hotels in states that did not have similar legislation.

 

May 14, 2014 in Conferences, In the News, Travel, True Contracts | Permalink | Comments (0) | TrackBack (0)

Tuesday, May 13, 2014

Weekly Top Tens from the Social Science Research Network

SSRNSSRN Top Downloads For Contracts & Commercial Law eJournal

RECENT TOP PAPERS f

RankDownloadsPaper Title
1 774 Aftermarketfailure: Windows XP's End of Support 
Andrew Tutt 
Yale University - Information Society Project 
2 199 The Futility of Cost Benefit Analysis in Financial Disclosure Regulation 
Omri Ben-Shahar and Carl E. Schneider 
University of Chicago Law School and University of Michigan Law School 
3 165 Killing Conscience: The Unintended Behavioral Consequences of 'Pay For Performance' 
Lynn A. Stout 
Cornell Law School - Jack G. Clarke Business Law Institute 
4 163 A Draft Australian Law of Contract 
Ted WrightM P Ellinghaus and D StL Kelly 
University of Newcastle (Australia) - Faculty of Business and Law, University of Newcastle (Australia) - Faculty of Business and Law and University of Newcastle (Australia) - Faculty of Business and Law 
5 135 The FTC and Privacy and Security Duties for the Cloud 
Daniel J. Solove and Woodrow Hartzog 
George Washington University Law School and Samford University - Cumberland School of Law 
6 124 Public-Private Contracting and the Reciprocity Norm 
Wendy Netter Epstein 
DePaul University - College of Law 
7 119 Document Appreciation: Some Characteristics of Legal Documents (and Talking with Students About Them) 
Jay A. Mitchell 
Stanford Law School 
8 119 Introduction to Philosophical Foundations of Contract Law 
Gregory Klass 
Georgetown University Law Center 
9 114 Payment after Actavis 
Michael A. Carrier 
Rutgers University School of Law - Camden 
10 111 Boilerplate Shock 
Gregory H. Shill 
University of Denver Sturm College of Law 

SSRN Top Downloads For LSN: Contracts (Topic)
RECENT TOP PAPERS 

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1 165 Killing Conscience: The Unintended Behavioral Consequences of 'Pay For Performance' 
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Ronald A. Brand 
University of Pittsburgh - School of Law 
3 133 Coasean Keep-Away: Voluntary Transaction Costs 
Jordan M. BarryJohn William Hatfield and Scott Duke Kominers 
University of San Diego School of Law, University of Texas at Austin and Harvard University 
4 126 Public Lands and the Federal Government's Compact-Based 'Duty to Dispose': A Case Study of Utah's H.B. 148 — The Transfer of Public Lands Act 
Donald J. Kochan 
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5 124 Public-Private Contracting and the Reciprocity Norm 
Wendy Netter Epstein 
DePaul University - College of Law 
6 119 Document Appreciation: Some Characteristics of Legal Documents (and Talking with Students About Them) 
Jay A. Mitchell 
Stanford Law School 
7 119 Introduction to Philosophical Foundations of Contract Law 
Gregory Klass 
Georgetown University Law Center 
8 91 Democratic Contract Law 
Martijn W. Hesselink 
University of Amsterdam - Centre for the Study of European Contract Law (CSECL) 
9 62 The Challenge of Co-Religionist Commerce 
Michael A. Helfand and Barak D. Richman 
Pepperdine University School of Law and Duke University - School of Law
10 62 The Incoherent Role of Bargaining Power in Contract Law 
Max N. Helveston and Michael S. Jacobs 
DePaul University - College of Law and DePaul University - College of Law 

May 13, 2014 in Recent Scholarship | Permalink | TrackBack (0)

Monday, May 12, 2014

No Frequent Complaining Allowed about Frequent Flyer Programs

By Myanna Dellinger

The United States Supreme Court recently held that airlines are allowed to revoke the membership of those of their frequent flyers who complain “too much” about the airline’s services (see Northwest v. Ginsberg).  Contracts ProfBlog first wrote about the case on April 3.

In the case, Northwest Airlines claimed that it removed one of its Platinum Elite customers from the program because the customer had complained 24 times over a span of approximately half a year about such alleged problems as luggage arriving “late” at the carousel.  The company also stated that the customer had asked for and received compensation “over and above” the company guidelines such as almost $2,000 in travel vouchers, $500 in cash reimbursements, and additional miles.  According to the company, this was an “abuse” of the frequent flyer agreement, thus giving the company the sole discretion to exclude the customer.  The customer said that the real reason for his removal from the program was that the airline wanted to cut costs ahead of the then-upcoming merger with Delta Airlines.  He filed suit claiming breach of the implied covenant of good faith and fair dealing in his contract with Northwest Airlines.

The Court found that state law claims for breaches of the implied duty of good faith and fair dealing are pre-empted by the Airline Deregulation Act of 1978 if the claims seek to enlarge the contractual relations between airlines and their frequent flyers rather than simply seeking to hold parties to their actual agreement.  The covenant is thus pre-empted whenever it seeks to implement “community standards of decency, fairness, or reasonableness” which, apparently, go above and beyond what airlines promise to their customers.

Really?  Does this mean that airlines can repeatedly behave in indecent ways towards frequent flyer programs members (and others), but if the members repeatedly complain, they – the customers – “abuse” the contractual relationship?!..  The opinion may at first blush read as such and have that somewhat chilling effect.  However, the Court also pointed out that passengers may still seek relief from the Department of Transportation, which has the authority to investigate contracts between airlines and passengers.

The unanimous opinion authored by J. Alito also stated that passengers can simply “avoid an airline with a poor reputation and possibly enroll in a more favorable rival program.”  These days, that may be hard to do.  First, most airlines appear to have more or less similar frequent flyer programs.  Second, what airline these days has a  truly “good” reputation?  Granted, some are better than others, but when picking one’s air carrier, it sometimes seems like choosing between pest and cholera.   

One example is the airlines’ highly restrictive change-of-ticket rules in relation to economy airfare, which seem almost unconscionable.  I have flown Delta Airlines almost exclusively for almost two decades on numerous trips to Europe for family and business purposes.  A few times, I have had the good fortune to fly first or business class, but most times, I fly economy.  Until recently, it was possible to change one’s economy fare in return for a relatively hefty “change fee” of around $200 and “the increase, if any, in the fare.”  - Guess what, the fares always had increased the times I asked for a change.  Recently, I sought to change a ticket that I had bought for my elderly mother, also using KLM (which codeshares with Delta) as my mother is also frequent flyer with Delta.  I was told that it was impossible to change the ticket as it was “deeply discounted.”   I had shopped extensively online for the ticket, which was within very close range (actually slightly more expensive than that of Delta’s competitors.  I asked the company what my mother could do in this situation, but was told that all she could do was to “throw out the ticket (worth around $900) and buy another one.”  Remember that these days, airfare often has to be bought months ahead of time to get the best prices.  In the meantime, life happens.  Unexpected, yet important events come about.  Changes to airline tickets should be realistically feasible, but are currently not on these conditions.

What airlines and regulators seem to forget in times of “freedom of contracting and market forces” is that some of us do not have large business budgets or fly only to go on a (rare, in this country) vacation.  My mother is elderly and lives in Europe.  I need to perform elder care on another continent and need flights for that purpose just as much as others need bus or train services.  Such is life in a globalized world for many of us.  In some nations, airlines feature at least quasi-governmental aspects and are much more heavily regulated than in the United States.  Here, airfare seems to be increasing rapidly while the middle (and lower) incomes are more or less stagnant currently.  I understand and appreciate the benefits of a free marketplace, but a few more regulations seem warranted in today’s economy.  It should be possible to, for example, do something as simple as to change a date on a ticket (if, of course, seats are still available at the same price and by paying a realistic change fee) without having to buy extravagantly expensive first class or other types of “changeable” tickets.   

Other “abuses” also seem to be conducted by airlines towards their passengers and not vice versa.  For example, if one faces a death in the family, forget about the “grievance” airfares that you may think exist.  Two years ago, my father was passing and I was called to his deathbed.  Not having had the exact date at hand months earlier, I had to buy a ticket last minute (that’s usually how it goes in situations like that, I think…).  The airline – a large American carrier - charged a very large amount for the ticket, but attempted to justify this with the fact that that ticket was “changeable” when, ironically, I did not need it to be as I needed to leave within a few hours.

In the United States, “market forces” are said to dictate the pricing of airfare.  In Europe, some discount airlines fly for much lower prices than in the United States (think round-trip from northern to southern Europe for around $20 plus tax, albeit to smaller airports at off hours).  Strange, since both markets are capitalist and offer freedom of contracting.  Of course, these discount airlines also feature various fees driving up their prices somewhat, although not nearly as much as in the United States.  A few years back, one discount European airline even announced that it planned to charge a few dollars for its passengers to use … the in-flight restrooms.  Under heavy criticism, that plan was soon given up.  In the United States, some airlines seem to be asking for legal trouble because of their lopsided business strategies.  Sure, companies of course have to remain profitable, but when many of them claim in their marketing materials to be “family-oriented” and “focused on the needs of their passengers,” it would be nice if they would more thoroughly consider what that means.

 

May 12, 2014 in Commentary, Current Affairs, Famous Cases, In the News, Recent Cases, Travel, True Contracts | Permalink | Comments (0) | TrackBack (0)

Dropbox Updates Its Terms of Service

A few months ago, I received an e-mail from Dropbox, on which I rely to back up all of my work.  The e-mail notified me that Dropbox was updating its privacy policy and Terms of Service.  "Uh oh," I thought.  Since I rely on Dropbox, I figured this was something I ought to look at carefully, but since the e-mail came during a hectic time in the semester, I just saved it to look at later. 

Today is later, and cleaning out my inbox is one way I take a break from term-end grading.  Here is part of the e-mail:

  • We’re adding an arbitration section to our updated Terms of Service. Arbitration is a quick and efficient way to resolve disputes, and it provides an alternative to things like state or federal courts where the process could take months or even years. If you don’t want to agree to arbitration, you can easily opt out via an online form, within 30-days of these Terms becoming effective. This form, and other details, are available on our blog.

D'oh.  If I had read this when I got it, I could have opted out of the arbitration policy!  Today, when I tried to click on the opt-out link, I got a screen that said, in effect, "Sorry sucker, you missed the boat!"  I had already accepted the new terms of service, including the arbitration clause, by using Dropbox for 30 days without reading the e-mail.  If anybody has attempted to opt out, please share your experience.  I really wonder how easy it is to opt out or if Dropbox is just counting on people not to bother.

Fortunately, most of Dropbox's terms are pretty reasonable as such things go.  Dropbox will pay all fees on claims under $75,000 and will pay a $1000 bonus to anybody who wins an arbitral award in excess of Dropbox's settlement offer.  Dropbox promises not to seek its own fees and costs unless the arbitrator determines that the claim is frivolous.   There are also exceptions to the arbitration provision for small claims and for injunctive relief, but the latter would have to be brought in San Francisco.  There is also the now-unavoidable ban on class actions, as well as consolidated or representative actions.  

Boo!

May 12, 2014 in Commentary, True Contracts, Web/Tech | Permalink | Comments (0) | TrackBack (0)

Friday, May 9, 2014

High School Students Across the U.S. Display Negotiation Skills: Retweets for #NoFinal

Andrew Muennink, a senior at Round Rock  High School in Texas, struck a deal with Cindy House, his art teacher: if he gets 15,000 retweets of a photo by noon on May 23, she will not require the students to take the art final exam.  The photo depicts them shaking on the deal and the writing on the blackboard behind them sets out the key terms:

Screen Shot 2014-05-09 at 10.19.23 AM

Apparently, Muennink's first offer to Ms. House was 5,000 retweets, but they ultimately struck the deal at 15,000.  What if he reaches 15,000?  Then, Muennink says, "I'd be the man!"  As of this writing, he's reached 6,117 retweets.

Muennink's bargain has inspired high school students across the U.S. - with some negotiating a better deal (10,000 retweets for no final) and others negotiating a much more difficult goal (250,000 tweets - and this student really needs the retweets because she "barely went to . . . class").

These students were apparently concerned about the statute of frauds and included signatures on the blackboard:

Screen Shot 2014-05-09 at 10.25.54 AM

If you are inclined to retweet and save a high school student from a final, the hashtag is #nofinal.

May 9, 2014 in E-commerce, In the News | Permalink | Comments (0) | TrackBack (0)

Thursday, May 8, 2014

Vermont First State to Require Labeling of GMOs

By Myanna Dellinger

On May 8, 2014, Vermont became the first state in the nation to require foods containing GMOs (genetically modified organisms) to be labeled accordingly.  The law will undoubtedly face several legal challenges on both First Amendment and federal pre-emption grounds, especially since giant corporate interests are at stake.

Scientists and companies backing the use of GMOs claim that GMOs are safe for both humans and the environment.  Skeptics assert that while that may be true in the short term, not enough data yet supports a finding that GMOs are also safe in the long term.

In the EU, all food products that make direct use of GMOs at any point in their production are subjected to labeling requirements, regardless of whether or not GM content is detectable in the end product.  This has been the law for ten years. 

GMO stakeholders in the United States apparently do not think that we as consumers have at least a right to know whether or not our foods contain GMOs.  Why not, if the GMOs are as safe as is said?  A host of other food ingredients have been listed on labels here over the years, although mainly on a voluntary basis.  Think MSGs, sodium, wheat, peanuts, halal meat, and now gluten.  This, of course, makes perfect sense.  But why should GMOs be any different?  If, for whatever reason, consumers prefer not to eat GMOs, shouldn’t we as paying, adult customers have as much a say as consumers preferring certain other products? 

Of course, the difference here is (surprise!) one of profit-making: by labeling products “gluten free,” for example, manufacturers hope to make more money.  If they had to announce that their products contain GMOs, companies fear losing money.  So why don’t companies whose products don’t contain GMOs just volunteer to offer that information on the packaging?  The explanation may lie in the pervasiveness of GMOs in the USA: the vast majority (60-80%, depending on the many sources trying to establish certainty in this area) of prepared foods contain GMOs just as more than 80% of major crops are grown from genetically modified seeds.  Maybe GMOs are entirely safe in the long run as well, maybe not, but we should at least have a right to know what we eat, it seems.

Bon appétit!

 

May 8, 2014 in Commentary, Current Affairs, Food and Drink, In the News, Legislation, Science, True Contracts | Permalink | Comments (0) | TrackBack (0)